Sequester update: Impacts on CBP and DOT

Thursday, February 28, 2013

Across-the-board funding cuts mandated to take effect on Friday would cut deeply into U.S. Customs and Border Protection operations, potentially doubling wait times from two to four or five hours for travelers and commercial trucks at air, land, and sea ports, agency leaders reiterated to industry trade associations in a conference call on Friday, according to one of the groups.
In testimony on Capitol Hill earlier this month, Homeland Security Secretary Janet Napolitano said the forced spending cuts would require CBP officers and Border Patrol agents to take up to 14 days unpaid leave. The furloughs at ports of entry could force truck drivers and travelers to sit in line four to five hours. Air travelers could face an extra hour wait to get through security because of Transportation Security Administration cutbacks, she said.
The automatic budget-cutting law that was the price for raising the debt ceiling in 2011, when the White House and House Republicans couldn't agree on a deficit-reduction plan, requires discretionary funding for non-Defense agencies to be cut 6 percent. Over 10 years, the sequester would reduce planned spending by about $1 trillion.
If Congress allows sequestration to go into effect, CBP will have to reduce its budget by more than $754 million by Oct. 1, most of which ($558 million) would come from its salary and expense account, according to the National Treasury Employees Union that represents many CBP front-line workers.
The cutbacks for various departments and agencies have changed some since last fall because of an agreement by the White House and Congress in January to allow some tax cuts to expire, thereby increasing government revenue. Spending cuts were not addressed in the "fiscal cliff" talks and the deadline for wholesale savings was postponed until March 1.
CBP will immediately eliminate overtime shifts, while furloughs will kick in more gradually because they require a minimum 30 days notice to the workforce, CBP officials said on the conference call, according to an update in the members-only section of the National Customs Brokers and Forwarders Association of America's Website.
Federal agencies are also supposed to negotiate with public employee unions over how to implement furloughs.
Participating in the call were Kevin McAleenan, acting assistant commissioner for field operations; Al Gina, assistant commissioner for international trade; and other senior officials, NCBFAA reported.
Cargo exams could take five days or longer to complete if the spending cuts take full affect, the CBP officials said. The budget situation also means delays for the roll out of the new Centers for Excellence and Expertise, some reduction in enforcement of intellectual property rights violations and anti-dumping/counterveiling duty cases, and jeopardizes the scheduled completion of the Automated Commercial Environment in three years after a multitude of previous delays, Gina said.
CBP officials emphasized that there will be no degradation of security, that they will focus on core processing for cargo and people, and continue agriculture exams. Secondary tasks will be conducted based on risk assessments.
They added that there will be a strong communications effort at individual ports to inform brokers, shippers and carriers about the operational tempo.
Another potential area of cost-cutting, not mentioned in the conference call, could be travel for government officials to participate in conferences. House Republicans have targeted government travel as an area of waste and the Office of Management and Budget last year instructed department and agency heads to spend at least 30 percent less in travel expense in fiscal year 2013 than they did in 2010.
The NCBFAA's conference in Rancho Mirage, Calif., is scheduled for mid-April, and the agenda is stacked with CBP and other government officials. Last week, Transportation Secretary Ray LaHood spelled out how sequestration would hurt his department, part of the Obama administration's effort to get voters to put pressure on Republican lawmakers to agree to tax increases as part of a deal. The Federal Aviation Administration, poised to lose $600 million, is taking the brunt of the department's $1 billion in cuts. DOT officials say furloughs will mean fewer air traffic controllers are available and warned the traveling public to expect delays of 90 minutes during peak periods at busy airports. Critics complain that the administration is exaggerating the impact and immediacy of the cuts.
DOT officials have indicated that highway and transit programs are immune from the budget cuts because they are sustained by dedicated revenue streams from users, but it is probable that some highway-related functions could be impacted since Congress plugged the Highway Trust Fund this year with $6.2 billion in money from the general fund. But a 6-percent cut of $6.2 billion amounts to a tiny fraction of total spending by the Federal Highway Administration, notes Streetsblog.org.
Most observers don't expect the White House and Congress to agree on alternative deficit-reduction measures in time to avert the automatic cuts, although the impact is expected to be gradual in most cases and could be reversed if Democrats and Republicans reach an agreement within a short period.
President Obama is scheduled to meet with congressional leaders at the White House on Friday for a late bargaining session.
"The sequester is going into effect Friday unless we have an act of God, and I'm pretty sure that's not happening," Janet Kavinoky, who heads transportation and infrastructure activities at the U.S. Chamber of Commerce, said Wednesday at the American Association of State Highway and Transportation Officials' government affairs conference in Washington.
Meanwhile, there is another budget crisis looming, even if lawmakers and the White House agree on plan for reducing the budget by about $1 trillion over 10 years through spending reductions, revenue-enhancement or some combination of the two. On March 27, the continuing resolution, which has temporarily funded the government by carrying over last year's spending levels in the absence of new appropriations laws, expires. That means funding will run out unless Congress agrees on a funding plan for the remainder of the fiscal year. - Eric Kulisch